Farmers Forum staff
OTTAWA — The Trudeau government’s retaliatory response to American tariffs will increase construction costs in Canada more than the actual tariff imposed by the Trump administration in the first place.
Canadian Homebuilders’ Association CEO Kevin Lee made that point during a March 4 press conference on Parliament Hill. U.S. President Donald Trump’s 25 % across-the-board tariff on Canadian goods will have only a “muted effect” on Canadian construction costs, according to the Association, but Canada’s countervailing tariffs will have a cost impact.
The organization has recommended that the Trudeau government avoid imposing retaliatory tariffs on construction materials imported from the U.S.
However, Trump’s tariff will slow the Canadian economy overall, which will reduce the number of housing starts in a country already short of housing supply, according to the Association.
Lee stressed that the key is to end the trade war as quickly as possible, on fair and acceptable terms for Canada, and that in the meantime, governments should take immediate steps to offset tariff-imposed increased costs of construction.
“Reducing (municipal) development charges …could more than offset any increased construction costs from tariffs. Measures to speed up approval processes can also save costs to offset increases from tariffs. And, at the federal level, we’ve long called for fixes to the GST on new home construction, and again, those fixes could offset tariff costs, and, like development charges, should be fixed anyway,” Lee said.
